News from the Knoff Group

Well, that was short lived…even buyers that were quoted their loans with the premium cut will have to pay full price.

FHA Premium Cut Officially Reversed; Mortgagee Letter Already Out
Jan 20 2017, 2:45PM

As was being widely rumored yesterday, the newly installed Trump Administration has indefinitely suspended a scheduled reduction in the annual premium for Federal Housing Administration (FHA) insurance. A 25-basis point reduction in that premium was announced by then Housing and Urban Development (HUD) Secretary Julian Castro on January 9, scheduled to go into effect on January 27.

Mortgagee Letter 2017-07 was issued about an hour after Donald Trump took the oath of office as President, counteracting the earlier Mortgagee Letter 2017-01. The new letter says “FHA will issue a subsequent Mortgagee Letter at a later date should this policy change.”

The Mortgage Bankers Association (MBA) reacted immediately to the shift. David H. Stevens, President and CEO, issued the following statement on behalf of MBA.

“We recognize the Administration’s need to examine the overall health of the insurance program and weigh that against the benefits of lowering mortgage insurance premiums. Given that lenders have already started preparing for the MIP decrease, it is important that any new policy be implemented in a way that minimizes disruption for borrowers and lenders. MBA looks forward to working with the new Administration to ensure the long-term stability of the FHA program, creating an environment that provides clarity in regulations for lenders while at the same time promoting access to credit and protecting consumers.”Source: FHA Premium Cut Officially Reversed; Mortgagee Letter Already Out